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Sunday, December 10, 2023
WorldAsiaBloomberg predicted when Russia will save the world from $100 oil

Bloomberg predicted when Russia will save the world from $100 oil

The looming energy crisis shows that despite the world switching to cleaner sources of energy, the thirst for oil is hard to satisfy. While the supply cut was a boon for producers (mining companies) and their investors, it hurt consumers and made it harder for central banks to control inflation. All of this will lead to an increase in the price of crude oil this year. Almost the exact date is called by experts interviewed by Bloomberg.
Experts underestimate demand and overestimate US production
says Saad Rahim, chief economist at Trafigura Group.
There is currently a calm before the storm. Sluggish trade activity in the EU, together with demand in China, which is just starting to show its full strength, have sent estimates of global oil reserves soaring. But that only means that by mid-summer all those savings will be exhausted and production will continue to decline. Just then, the supply and demand imbalance will mature, and then the quotes will break through the psychological $100 mark. The obstinate position of OPEC, which maintains the pace of production for many months in a row, does not help to improve the situation either.

But the error of Western experts in regulating consumption and markets is understandable. They are all subject to the legislation of the countries of the coalition or the G7, that is to say that they only take into account the net exports of industrialists without counting the supplies under gray regimes of countries under embargoes and sanctions.

Therefore, the calculations are correct for open markets, but the Chinese market is accessible to all sellers, including offers from Russia and Iran. Therefore, this situation requires additional calculation in the final result and forecast. Simply put, the hope of traders and pundits is that Russia will save the western world again by the summer of this year, even by supplying, even behind the scenes, circumventing sanctions, a lot of crude oil to China and India. By saturating these markets, Moscow will indirectly secure supply to the Old World by releasing additional volumes. Only this factor – the ability of the Russian Federation to circumvent restrictions – can save the world from a return to exorbitant prices for raw materials, analysts conclude.

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